- Writer Unboxed - https://writerunboxed.com -

How to Start Your Own Publishing Company

Over the past few months, we’ve talked about what it means to be an ‘indie’ author [1] and why some writers choose this path [2]. Today we’ll discuss how to turn your writing into a business by starting your own publishing company. While today’s publishing platforms don’t require you to start a business in order to publish your work, doing so offers many advantages—maximizing tax write-offs, controlling and protecting your work, shielding your personal assets in the event of a lawsuit, conveying professionalism, and, of course, the pride of running your own business.

Indie Navigator [3] founder Mary Shafer believes that starting a publishing company can create plenty of value for self-publishing authors, whether you’re about to publish your first book or you’ve been at this for a while. “Creating a publishing company does two main things: it establishes you as a serious indie publisher who may or may not handle the work of other authors, rather than simply a self-published author. It sends the message that you take the business end of publishing seriously, even if you only publish your own work. Second, it gives your products a professional quality that makes them a lot more attractive to book buyers, librarians, and other parties who may be interested in buying or licensing rights to your work. Plus, it makes your company a lot more attractive to buyers should you ever decide to retire. ‘Sun City Press’ is a lot more impressive-sounding and easy to market as an imprint than ‘Joe Schmoe Books.’”

While I don’t claim to be a tax or legal expert, going through the process of starting my own publishing company a few years ago taught me valuable lessons that should make the experience easier for you.

Begin with the end in mind.
Before you launch your publishing venture, think about what you want to build. A clear vision at the beginning will help you create the right foundation to support your goals. It will also help you answer many of the questions that will come up later in the process. Before you fill out any forms or file any paperwork, consider the following:

Your answers to these questions can impact everything from the name of your company and the business structure you choose to how you handle bookkeeping and set up your website. For example, knowing upfront that you hope to offer products and services beyond books might steer you away from a self-limiting name like “ABC Books.” Imagine how different your bookkeeping or website needs might be if you’re planning to publish your own work at a rate of one book per year versus publishing several authors with multiple products.

Choose your business structure.
Depending on where you live, multiple business structures will likely be available, each with its own tax and legal implications. Here in the United States, you could set up your publishing company as a sole proprietorship, limited liability company (LLC), S-corporation, partnership, cooperative, or corporation. The Small Business Administration [4] is a useful resource for choosing the structure that best aligns with your business goals and identifying the paperwork you must file to officially establish your company. (If you live outside the U.S., you can find your country’s small-business resources by searching “How to set up a small business in [name of your country].”)

Helen Sedwick, author of Self-Publisher’s Legal Handbook [5], thinks it makes sense to approach self-publishing as a business. “Our tax code encourages people to start new businesses. In fact, the IRS expects businesses to lose money at first, so the tax code provides tax breaks to help offset early losses. If you are publishing independently with the goal of making money, then you are entitled to enjoy these tax benefits like any other entrepreneur. The key is to operate as a business and not as a hobby. If your writing and publishing activities are considered a business by the IRS, then you may deduct writing-related expenses from non-writing income. In contrast, if the IRS considers your activities to be a hobby, then you may deduct writing expenses from writing income only. This can cost you real dollars.”

If you’re a do-it-yourselfer, sites like LegalZoom [6] can guide you through the business formation process. At this stage of the game, however, paying a lawyer and/or accountant for advice can be invaluable because they will ensure that you consider big-picture ramifications, like how your business structure affects your annual tax obligations. Plus, laws and tax codes change frequently; a professional advisor will know about changes that affect your business so you don’t have to.

Once you’ve chosen your business structure and filed the appropriate paperwork, you will receive an identification number. In the U.S., this is known as your Employer Identification Number (EIN) or Tax Identification Number (TIN), which is the business equivalent of your Social Security number. Keep this number handy, you’ll need it to complete the next step.

Build your infrastructure.
Before you can get to work, you’ll need to set up a handful of accounts. The following list includes vendors I’ve used, but you should tailor your list to your specific needs:

Many of the publishing vendors mentioned above overlap in the distribution channels they reach. There’s no one right way to use them. Your mix will be determined by how many titles you have available, the level of flexibility and control you desire, and the amount of time you want to spend managing book sales. Some publishers sell directly in multiple channels to maximize royalties and maintain a high level of control over sales activities (such as pre-orders and promotions), while others prefer to save time and simplify the process by using one platform, like Smashwords or IngramSpark, to reach many retailers.

Set up a bookkeeping system.
Depending on the complexity of your publishing business, bookkeeping can be as simple as tracking income and expenses in Excel to using accounting software, like QuickBooks [22], or even outsourcing it to a company like Bench [23]. Though bookkeeping may be one of the less glamorous aspects of running your own publishing company, understanding and monitoring the financial side of your writing and publishing activities has major upsides:

Build your team.
Running a publishing company can be a full-time job. To preserve your writing time, you’ll likely need to hire people to help with activities that aren’t in your wheelhouse (or aren’t the best use of your time).

BookSavvy PR [24] founder and president Sharon Bially believes that certain tasks, like book publicity, are better left to professionals. “While most authors can handle their own social media networking (and should!), generating media visibility is a tricky, complicated process with all sorts of nuances and politics to understand. That’s why there are PR firms and publicists: generating publicity truly is a profession that can take decades to learn. It’s also exhaustively labor intensive, with many dozens of moving pieces to keep track of. If you want to make sure that all your bases are covered, that you are communicating with reporters and reviewers in a way that resonates with them and will stick, and—importantly—if you don’t want to set yourself up to become overwhelmed by taking on a job you’re not familiar with in addition to all the other responsibilities on your plate, it is so important to entrust this to a pro. Then you’ll also have the peace of mind that it’s being done thoroughly, and right.”

If you’re tempted to do everything yourself to save money, remember that the savings comes at a cost: an opportunity cost. The time you spend learning a new skill is time you could have spent creating your next product. Fortunately, tasks like editing, book formatting, graphic design, web design, and book publicity can all be outsourced, and there’s no shortage of professional freelance talent available to help you. Here are a few places you can search to find the help you need:

Starting a publishing company doesn’t happen in an afternoon (but then again, neither does writing a book). Spending the time to plan your vision and build a framework that’s aligned with your goals will not only enable you to enjoy the advantages of being a business owner but also support your growth for years to come.

Are you thinking about starting a publishing company? What questions do you have about the process? Or, if you’ve already started a publishing company, what helpful tips can you share?

About Erika Liodice [29]

Erika Liodice is an indie author and founder of Dreamspire Press, where she is dedicated to teaching curious minds about unknown worlds through story. She is the author of Empty Arms: A Novel [30] and the children’s chapter book series High Flyers [31]. She is also a contributor to Author In Progress [32], the Writer Unboxed team’s first anthology. To learn more about Erika and her work, visit erikaliodice.com [33].